Microsoft wants a memorable Monday

Analysis: Speculation, timing hints at a new tablet on tap

SAN FRANCISCO (MarketWatch) — Is it possible that by taking a page out of Apple Inc.’s playbook and saying next to nothing about a “major” announcement set for Monday that Microsoft Corp. might have done something extraordinary in creating some excitement?

Microsoft
MSFT, -0.38%
or rather its public-relations agency, Waggener Edstrom, sent out invitations to the press and industry analysts for what is being called an “major” announcement on Monday. Instead of holding the event at headquarters in Redmond, Wash., or even a few miles away in Seattle, Microsoft has chosen to do whatever it’s doing in Los Angeles.

One of the reports that have come out says Microsoft is more than borrowing from Apple
AAPL, -0.87%
in marketing, but actually unveiling its own branded tablet for the Windows Mobile operating system. It also could be something that has the characteristics of the Xbox.

Among consumers, the Xbox 360 has been a solid hit. When Microsoft reported its fiscal third-quarter results in April, the company cited industry figures showing that the Xbox was the top-selling videogame console in the United States for the 15th month straight.

Even so, revenue from Microsoft’s entertainment and devices division, which includes the Xbox, fell 16% in the quarter from a year ago, to $1.62 billion, with the unit swinging to an operating loss of $229 million from earning $210 million in last year’s third quarter. But that loss is like sand off a beach compared with Microsoft’s hoard of nearly $60 billion in cash, cash equivalents and short-term investments.

The company has plenty of money to support Xbox, and fund development of software and services that can appeal to all the players at home, including the 40 million Xbox Live members who use their consoles to play games online. A tablet made by Microsoft and incorporating features of the Xbox would seem to have a built-in user base from the moment of its release.

Top 5 in tech: Apple to Yammer

(5:48)

Here’s a wrap of the big tech stories this week.

“If Windows 8 tablets are well made and have compelling features relative to rivals at comparable price points, then we think it should be able to establish meaningful market share,” said Richard Williams, of Cross Research. “This is the big question that has to be resolved in the marketplace.”

It’s no secret that Microsoft has a decidedly mixed history when it comes to hardware products, especially where mobility is concerned.

There’s been the Zune, Microsoft’s attempt at a digital-music player, and the Kin smartphone that was quickly scotched. Then just this week, Nokia Corp.
NOK, +0.28%
maker of the ballyhooed Nokia Lumia 900 smartphone running Windows Phone, cut its revenue forecasts, shook up some of its executive ranks and said it would slash 10,000 jobs. Read more about Microsoft's risks in dealing with Nokia.

Still, Williams said that Dell Inc.
DELL
and Hewlett-Packard Co.
HPQ, -0.33%
are expected to release tablets running on Windows 8 for mobile devices. Because of that and other partner commitments, Williams said distribution of a Windows tablet doesn’t appear to be an issue.

Nokia

Nokia Lumia 800, the Finnish company's first smartphone on the Windows Phone platform.

“The only reason we can think of that Microsoft would want to produce its own hardware for a tablet would be if the partner opportunity was no longer viable,” he added.

Yet Dell and H-P are dealing with their own business issues. At its analysts’ meeting this week, Dell sounded more like it’s trying to be a junior version of International Business Machines Corp.
IBM, +0.64%
with emphasis on enterprise solutions and services. H-P itself has committed to eliminating 27,000 jobs over the next two years and put more focus on “cloud, big data and security,” as the company said in late May.

For Microsoft, the timing may be right to venture forth on the tablet front.

Intraday Data provided by SIX Financial Information and subject to terms of use.
Historical and current end-of-day data provided by SIX Financial Information. Intraday data
delayed per exchange requirements. S&P/Dow Jones Indices (SM) from Dow Jones & Company, Inc.
All quotes are in local exchange time. Real time last sale data provided by NASDAQ. More
information on NASDAQ traded symbols and their current financial status. Intraday
data delayed 15 minutes for Nasdaq, and 20 minutes for other exchanges. S&P/Dow Jones Indices (SM)
from Dow Jones & Company, Inc. SEHK intraday data is provided by SIX Financial Information and is
at least 60-minutes delayed. All quotes are in local exchange time.